Novo Nordisk Cuts 2025 Outlook

Source Credit : Reuters

On Wednesday, obesity drug manufacturer Novo Nordisk announced a downgrade to its 2025 sales forecast. This marks the end of a four-year period of consistent guidance increases following the launch of its Wegovy weight-loss drug. The decrease in sales forecast comes as U.S. prescriptions for the drug have stopped growing.

The company reported that first-quarter sales of its groundbreaking weight-loss drug, Wegovy, totaled 17.36 billion Danish crowns ($2.64 billion). This figure represents a 13% decrease from the previous quarter and falls short of the 18.7 billion crowns anticipated by analysts.

The recent downgrade and sales miss of Wegovy are likely to heighten concerns among investors that Novo is relinquishing its position as a leader in the highly competitive obesity drug market to its main competitor, Eli Lilly. The impressive sales growth of Wegovy had previously propelled Novo to become Europe's most valuable publicly traded company, reaching a peak valuation of $615 billion.

Despite Novo increasing supplies of Wegovy to meet demand, prescriptions in the United States, its largest market, have remained stagnant since February. As a result, Novo's market value has decreased by half to approximately $310 billion.

The Danish company has revised its sales growth forecast for 2025, now expecting an increase of between 13% and 21% in local currencies. This adjustment comes after initially projecting a range of 16% to 24% at the start of the year. Additionally, the company anticipates operating profit growth of 16% to 24% for the current year, down from the previously guided range of 19% to 27%.

According to a consensus compiled by the company from 26 analysts, sales are projected to increase by 17.8% and operating profit by 21.5% this year.

"In the first quarter of 2025, we delivered 18% sales growth and continued to expand the reach of our innovative GLP-1 treatments," CEO Lars Fruergaard Jorgensen said in a statement. "However, we have reduced our full-year outlook due to lower than-planned branded GLP-1 penetration, which is impacted by the rapid expansion of compounding in the U.S.," he said.

Novo has reported first-quarter earnings before interest and taxation of 38.79 billion crowns, exceeding the forecast of 37.20 billion crowns compiled by the company from 26 analysts. This represents a 22% increase from the previous year.